About six months have passed since Societe Generale issued a $100 million EUR (around $110 million USD) bond using the blockchain technology. The company issues the asset on the Ethereum blockchain, but it hasn’t used it for a single client yet, as the bond was sold to itself at the time. So, why has the company decided to do it?
According to Jean-Marc Stenger, CEO of SocGen’s subsidiary Forge Digital Capital Markets, the intention was not to resell the asset. Instead, the idea was to experiment with the platform. He affirmed that many large companies are experimenting right now, so they wanted to do it as well.
BBVA, for instance, had a $150 million syndicated loan made on top of the Ethereum network. Last month, Santander issued a $20 million bond using the same platform. SocGen did not want to be left behind. The company is currently monitoring how smart contracts work and will determine how good they are to automate this process.
Stenger affirmed that the company is waiting to see if the technology is actually the future or just a fad. Now, the next step after that trial is to eventually issue a blockchain-based bond that will be offered to external investors.
For now, the executives at Societe Generale don’t believe that most companies will use the blockchain for settlements. Part of the reason why the company is taking a slower approach to this issue is that it believes that the clients will not shift from using traditional ways overnight. It is important to be prepared, not to rush into new technologies, Stenger affirmed.
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